Vacation Time Share Exchanging

+ RCI  & II  Vacation Time Share Exchanging Tips:

- with Vacation Time Share Rentals Cost Comparison
 (From a Couple who have been Timeshare Owners & Exchangers
for over 30 years)

Time Share Exchanging:
The BIG question -

Do Vacation Time Shares REALLY save you Money on Vacations Vs Rentals?

2. Do Time Shares Really Save you Money on Vacations?

They can save you some depending on your "Vacation Style," but they can COST you big time if use don't USE them regularly -- whether at your Home Resort, or at Resorts you exchange to. (The "convenience" of vacationing at your home resort or time share exchanging to other vacation resorts in the time share network is hard to put a dollar value on for this comparison.)

To analyze -- and try to compare "Apples with Apples."
(I will use Ocean Front Time share and Condo Rental examples I am familiar with since My Wife and I are big fans of Ocean Vacations and we own and exchange to mostly Ocean Front Resorts. -- the "relative" cost comparison will be the same regardles of specific type of Resort.)

Vacation Condo Rental: If you were to shop around and Rent a nice Ocean Front 2-bedroom Condo in Virginia Beach at a peak (Red) time - June thru August, you would find that the current going price for a Week Rental ranges between $1,200 and 1,700 depending on the Resort and amenities. Lets say you are always able to get a good deal and use $1,200 for this example.

Time share Purchase cost/year: I just (8/26/04) looked up some Owner Resell unit prices and find that current peak Red time (June - Aug) 2-bedroom Time share Weeks at Virginia Beach for this example are offered for sale between $6,500 up to $16,900. These are "Deeded" weeks Vs "Leased" weeks where you actually Own the Timeshare Real Estate Week and get a filed Deed. (In most experts view, best way to own Time Shares! - more on that below) Lets use a purchase price of $9,400 for this example.

• Closing costs for an Attorney (protect your self with an Attorney & Title Insurance on something as complicated as a Time Share!), Title Insurance and/or Search, Title/Escrow Co. Closing Fees, and Filing Deed, etc. will probably run $600 - 1,000 -- lets use $800. This brings the initial total cost of your new Time Share Week up to $10,200
  
  
• You either are borrowing all or some of the timeshare purchase price from your friendly Banker, or you are "using" some funds that prior to this purchase were earning you some rate of return.
  
  Lets say your Banker was very "Friendly" and/or that you were consistantly averaging about a 6% rate of return on the funds you used for this Time Share Week purchase. Technically we should subtract the Rental Cost of $1,200 from the $10,000 here since we would not have had use of those funds -- we were using them for the Rental with that option.
  
  This would make the "Funds Cost" of this purchase 6% times the: $9,400 purchase price - less the $1,200 we would have used for the Rental Condo + the $800 closing costs = $9,000 x .06 = $540/Yr.
  
  
• Your Share of the Ongoing Maintenance Fees, Upkeep, Furniture, Appliances, Roof and Pool replacement Reserve + your share of the Real Estate Taxes and Property Insurance will run you about $390 - $550 a year on your 2-bedroom timeshare Unit. (I just checked on some time share Resorts in Virginia Beach.) Lets use $475 per year. (Note: You can expect Maintenance / Upkeep fees to go up by at least the US inflation rate each hear - usually more. -- WAY more if your Resort had a hurricane "hit" last year as happened in several Florida Resorts!) 
  
  
• One of the Main Benefits of Time share Ownership is the ability to use your Unit week for time share exchanging to other time share Resorts at other times and locations all over the World. The current costs to belong to the large Resort Condomonium International(RCI) exchange Network and get their Time Share Exchanging Vacation Travel publications and thick Resort Listings Catalog is $89 per year. Interval International (II) is $79 per year. Lets use $90 per year here for easy figuring.
  
  
• Sometimes you will Vacation at your Home Resort, and sometimes you will want to do Time Share Exchanging to other Resorts in the Network. Lets say you exchange every other year. The cost of an Interval Exchange -- to "Spacebank" your time share week and to have their computers search out and do a time share exchange to another Week - Based on your Selection Criterion -- currently costs $139 at RCI (A little less at II - this fee has gone up over the years as Time share Exchanging has become more popular) Lets use $140 every other year or an average of $70 per year for this example.
  

So what are are comparison Totals of the costs of Renting a Virginia Beach 2-bedroom Beach Front Vacation (Possibly Time share) Condo -- as compared with the Annual costs we have calculated above for owning our Time Share Week and having the option of time share exchanging?

• Rental - $1,200 per year - Only for the years we decide to go on a week's vacation using a Rental Condo.
  
  
• Vacation Time Share Ownership Costs per year
  $540 - Annual Money use costs
  $475 - Resort Association Maintenance Fees/Year (Increases)
  $  90 - Exchange Network annual Dues/Yr
  $  70 - Average cost to Exchange every other Yr.
  ______
  $1,175 Total per Yr Cost of Time Share Vacations
  

Almost a wash when you have figured in the Annual Money costs -- but lets look at the other Outside Considerations for both Vacation condo rentals or Vacation time share rentals and Timeshare Ownership.

Pro Condo Rental:

• You only have to pay Rental fees the years you take a week vacation using a Vacation Condo Rental -- No Condo Vacation that year, no rental fee.
  
  
• Thus, You aren't "pressured" into vacations you might not have taken otherwise had you not had the annual expense of the Timeshare week looming - regardless of whether you used it or not. (See comments on "Spacebanking" for future use and possible Rental Income below.)
  
  You have a wide variety of Rental Options available to you - many to Time share Condo Rentals available almost anywhere -- you do have to search them out on your own.
  
  

Pro Time share Vacation Week Ownership

• You always know that you can go to your Great Home Resort which you picked in the first place because you liked the area and amenities. ( Tip - I think it is very important to purchase a Resort that you want to USE, not just because you think it will exchange well. Get Red (High) Time in either event since you can normally only exchange for the level of "Time" you have or less. You can exchange Up to "High" from "Medium" or "Low" Time for "last minute" exchanges only.(during 60 days before travel date) It greatly limits you when exchanging to not own a Red (High) time week!
  
  
• You have the option of Time Share Exchanging to approximately 3,000 other Time Share Resorts (for RCI or II) all over the world. (Slightly more resort options for RCI than II)
  
  
• You also have the option of "SpaceBanking" your week in either RCI or II for up to 2 years so you can draw on it to combine with that years week for a 2-week Time share exchanging vacation later.
  ( Tip - I personally would only consider Resorts that were affiliated either with RCI or II because of the maximum exchange flexability and high quality resorts they offer in their Networks as compared to other small time share exchange Networks or Vacation Travel Clubs. - Please send me a note on comments form if you have had a experience -- good or bad -- exchanging with a "small" exchange network other than RCI or II.)
  
  
• Hopefully if you have picked a popular Resort Area and have good on-site Management, you will be able to contract with them to Rent your Unit for you in the years you do not use it or wish to "Bank" the fime for the future - and some of the time they may be able to rent it out for you.
  
  -- Or you can try renting it yourself. We were never able to successfully do that in the several years that we tried - using several online listings + online classifieds. We finally decided it was best to just pay the rental fee and turn it over to the onsite Rental Company - (I would caution against using an offsite Rental Company - or purchasing a Time Share in a resort which did not have an Onsite Management Company) - see why later.
  
  
• - We have found - for an overall average over several years (some with Rental Income, and some not) - that our average Net Rental Income from the weeks we had the Management Co. rent for us is just about equal to the total of the Annual time share Maintenance Fees and time share Vacation Exchange Network fees.
  
  We own 4 time share weeks in Florida - two more than we really need! Two are 1-bedroom Weeks in an II Resort that we bought in the "Construction Phase" in early 1980 that we were unsucessful in selling after we purchased two 2-bedroom weeks at a nearby "Under Construction" interval Timeshare resort in 1981.
  
  The two 2-bedroom weeks are in RCI at Las Olas Beach Club in Satellite Beach, Florida. Now that my Wife and I are usually not travelling with the kids (May be occasionally bringing along Grandkids soon!), we now usually use and do time share exchanging with the
  1-bedroom II weeks at Ocean Landings Resort in Cocoa Beach, Florida , and have the onsite Management Co. at Las Olas rent out the 2-bedroom RCI weeks. They rent for more and a 1-bedroom unit is now fine for just the two of us. (We sometimes prefer to exhange in RCI however, because they have more resorts and we have found it is often easier to get an exhange to where and when you want. Thus, we sometimes still use an RCI 2- bedroom week for a "hard to get" exchange area.)
  
  We tried to sell the 1-bedroom weeks a few times years ago, but the Resale Prices weeks were actually selling for were so far below the Prices we paid purchasing from the Developer - even during the lower priced Construction Phase - that we decided to just keep them and give them to the kids for use with their growing families later.
  
  We put them in the "Rental Pool" for nominal rental income when we don't use or do a time share exchange with them. (I have some reservations about the "Rental Pool" concept where everyone with a unit for rent that week shares in all rental revenue for the week - another reason why we usually use or exchange these weeks Vs rent them.)
  
  (Tip  Beware of Sales listing Companies that charge an up-front "Listing fee" plus a sales commission (If week sells) for advertising your Time share week(s) for sale - our experience was it ended up being just an expensive Ad in a NOT-very-well-known database and we never heard from them again after the weeks were listed.)
  
  
• Do NOT plan on a time share as an Investment that increases in value or provides rental income greater than your expenses. -- altho do talk with your tax preparer about putting it on your tax return if you rent it out regularly since you will want to offset the rental income with your yearly expenses.